Rezangla Trust, Rewari V. CIT, Rohtak

ITA 2693/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2294 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 14-12-2009
• Assessment Year: misc
• Appeal Filed On: 02-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Assessee Lawyers: RAVI GUPTA
• Keywords: Gift
• Section: 12AA

Judgement Text

ITA NO. 2693 DEL 09 REZANGLA TRUST, REZANGLA WAR MEMORIAL, REWARI 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE THE HON'BLE PRESIDENT, SHRI VIMAL GANDHI AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2693/DEL/2009 REZANGLA TRUST, VS. COMMISSIONER OF INC OME TAX, REZANGLA WAR MEMORIAL, ROHTAK (HARYANA) DELHI ROAD, REWARI (HARYANA) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAVI GUPTA, ADV. DEPARTMENT BY : SH. H.K. LAL, SR. DR ORDER PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX, ROHTAK DATED 30.3.2009 . 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX HAS ERRED IN REJECTING THE APPLICATION OF THE ASSESSEE TO REGISTER THE TRUST UNDER SECTION 12AA OF THE ACT. 3. THIS CASE PERTAINS TO APPLICATION FOR REGISTRATION O F TRUST IN CONNECTION WITH MARTYRS OF ARMED FORCES IN WAR AT REZAN GLA IN 1962. THE MATTER HAD EARLIER TRAVELLED TO THE TRIBUNAL IN ITA NO. 2022/DEL/2005 VIDE ORDER DATED 30.11.2007, THE MATT ER WAS RESTORED TO THE FILES OF THE CIT FOR RECONS IDERATION OF THE ISSUE. ITA NO. 2693 DEL 09 REZANGLA TRUST, REZANGLA WAR MEMORIAL, REWARI 2 ACCORDINGLY, THE MATTER WAS CONSIDERED BY THE LD. CI T. LD. CIT OBSERVED AS UNDER:- PERUSAL OF APPLICANTS REPLY DATED 26.3.2009 AND IT S ENCLOSURES INDICATE THAT THE RESOLUTION WAS PASSED BY THE GENERA L BODY OF THE REZANGLA SHAURYA SAMITI, REWARI ON 30.3.2008 TO ENABL E THE SOCIETY TO CONSTITUTE A REZANGLA TRUST AND, THEN, A C OPY OF CHALLAN FORM S.TR-4 DATED 5.2.2009 DEPOSITING FEES OF RS. 500 /- WITH REGISTRAR OF FIRMS AND SOCIETIES REVEALS THAT THE RE SOLUTION WAS SENT TO THE REGISTRAR, FIRMS AND SOCIETIES ONLY AFTER 05.02.2009. IT MEANS THE REZANGALA SHAURYA SAMITI, REWARI, A SETTL ER, ADMITTEDLY HAD NO POWERS TO CREATE A TRUST OUT OF THE SOCIETYS ASS ETS EVEN WHEN IT APPLIED FOR REGISTRATION OF REZANGLA TRUST U/ S 12AA OF THE INCOME TAX ACT ON 27.08.2004 AND TILL FEBRUARY, 2009 WHEN THE AMENDMENT RESOLUTION WAS GOT REGISTERED WITH REGISTRAR OF FIRMS AND SOCIETIES. THE TRUST CREATED BY THE SOCIETY WAS, THEREFORE, NOT A VALID TRUST AT THE TIME OF MAKING APPLICATION FOR R EGISTRATION U/S 12AA OF THE INCOME TAX ACT OR AT THE MOST TILL THE HE ARING FOR THE ORIGINAL ORDER WAS CONCLUDED ON 22.2.2005. MOREOVER, AS PER TRUST DEED DATED 25.6.2004 (DOCUMENT NO. 2249 DATED 25.6.2004), PRIOR TO THE EXECUTION OF THESE PRES ENTS, THE SETTLER HAD HUNDRED OVER THE SAID SUM OF RS. 10,000/ - TO THE ITA NO. 2693 DEL 09 REZANGLA TRUST, REZANGLA WAR MEMORIAL, REWARI 3 TRUSTEES.; BUT COPY OF ACCOUNTS OF THE APPLICANT T RUST REVEALS THAT A BANK ACCOUNT NO. 1725000100142137 WAS OPENED IN THE NAME OF THE APPLICANT TRUST IN PUNJAB NATIONAL BANK REWARI WIT H A CASH OF ONLY RS. 1500/- ON 25.6.2004. IT ALSO MEANS THAT THE TRUST WAS NOT CREATED PROPERLY, THE SETTLED MONEY BEING NOT PASSED ON TO THE TRUSTEES AS STIPULATED IN THE TRUST DEED. HENCE THE LD. CIT R EJECTED THE APPLICATION FOR REGISTRATION OF THE TRUST. 3.1 AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 4. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT THE FIRST OBJECTION OF THE CIT IS THAT REZANGL A SHAURYA SAMITI, REWARI THE SETTLER HAD NO POWER TO CREATE A TRUST OUT OF SOCI ETY ASSETS AND THAT EVEN WHEN THE APPLICATION FOR REGISTRATION FOR REZANGLA TRUST UNDER SECTION 12AA OF THE IT ACT WAS MADE ON 27.8.2004, IT WAS TILL FE BRUARY, 2009 THAT THE AMENDMENT RESOLUTION WAS NOT REGISTERED WITH THE RE GISTRAR OF FIRMS OF SOCIETIES. FROM THIS LD. CIT INFERRED THAT IT WA S NOT A VALID TRUST BY THE TIME OF MAKING APPLICATION OF REGISTRATION UNDER SECTION 12AA OR AT THE MOST TILL THE HEARING OF THE ORIGINAL ORDER WAS CONCLUDED ON 20.2.2005. IN THIS REGARD, WE HAVE GONE THROUGH THE MEMORANDUM OF ASSOCIATION OF REZANGLA SHAURYA SAMITI TRUST WHICH READS AS UNDER:- A) TO CELEBRATE REZANGALA SHAURYA DIVAS ON 18 TH NOVEMBER EVERY YEAR. B) TO UNDERTAKE WELFARE MEASURES FOR THE WELFARE OF WIDOWS, CHILDREN, ADOLESCENT GIRLS, DESTITUTE, AND OLD AGED PERSONS OF ITA NO. 2693 DEL 09 REZANGLA TRUST, REZANGLA WAR MEMORIAL, REWARI 4 THE FAMILIES OF JAWANS WHO LAID DOWN THEIR LIVES AT RE ZANGALA IN 1962 AND THE OTHER HEROES OF DEFENCE SERVICES. C) TO WORK FOR THE IMPROVEMENT OF STATUS AND SELF EMPLOY MENT OF THE DEPENDENTS OF THE JAWANS WHO LAID DOWN THEIR LIV ES IN ACTION THROUGH OPENING SOME VOCATIONAL/ EDUCATIONAL / TRAINING INSTITUTE/ COATING CENTRE ETC. D) TO WORK FOR THE GENERAL PROGRESS AND UPLIFTMENT OF T HE EX- SERVICEMEN, MARTYRS FAMILY MEMBERS THROUGH LAUNCHING ELECTRONIC/ PRINT MEDIA PUBLICATIONS. E) TO PROMOTE SOCIAL, ACADEMIC, CULTURAL AND ECONOMIC INTERESTS OF THE POOR MASSES. F) TO COLLECT FUNDS BY DONATION, GRANTS, AIDS, SUBSIDI ES, SUBSCRIPTIONS, ORGANIZING CHARITY SHOWS OF ENTERTAINMEN T AND SPORTS AND OTHER LAWFUL ACTIVITIES IN FURTHERANCE OF THE AIMS AND OBJECTS O THE SOCIETY. G) TO HONOUR ANY PERSON WHO HAS DONE EXCEPTIONALLY GOOD IN ANY WALK OF LIFE. H) TO COMMENCE, INSTITUTE OR DEFEND ALL LEGAL ACTIONS, LAW SUITS, AS MAY BE DEEMED NECESSARY IN THE INTEREST OF THE EX - SERVICEMAN, IF NECESSARY. I) TO ACQUIRE, HOLD OR DISPOSE OF MOVABLE AND IMMOVABLE PROPERTIES TO SECURE THE AIMS AND OBJECTS OF THE SOCIETY . J) TO RAISE A CORPUS OF SUFFICIENT AMOUNT IN FURTHERA NCE OF THE CAUSE OF THE SOCIETY WITH THE ACTIVE HELP AND SUPPORT OF ARMED FORCES, CONSTITUTE A REZANGLA TRUST. 5. THE ASSESSEE HAS AMENDED THE OBJECT BY WAY OF INS ERTION OF CLAUSE (J) ABOVE TO ENABLE THE FORMATION OF TRUST, THOU GH AFTER FIRST ITA NO. 2693 DEL 09 REZANGLA TRUST, REZANGLA WAR MEMORIAL, REWARI 5 MOVING THE APPLICATION FOR REGISTRATION. EVEN OTHERWISE, WE FIND THAT CLAUSE (I) ABOVE PERMITS THE ASSESSEE TO ACQUIRE, HOLD OR DISPOSE OF MOVABLE AND IMMOVABLE PROPERTIES TO SECURE THE AIMS AND OBJECTS OF THE SOCIETY. ADMITTEDLY THE CLAUSES (I) WAS VERY MU CH THERE AT THE TIME OF MAKING OF APPLICATION FOR REGISTRATION. WE FIND THAT THE SAMITI HAS TENDERED A SUM OF RS. 10,000/- FOR FORMATION OF REZANG LA TURST. THE AIMS AND OBJECTIVES OF THIS TRUST ARE AKIN TO THAT OF REZANGLA SHAURYA TRUST AND ALSO READ AS UNDER:- A) TO MAINTAIN, DEVELOP, EXPAND AND CONTROL ALL THE AF FAIRS RELATED TO REZANGAL WAR MEMORIAL, DELHI ROAD, REWARI. B) TO PROVIDE EDUCATIONAL GUIDANCE TO THE CHILDREN OF TH E EX- SERVICEMAN, WAR WIDOWS AND THEIR DEPENDENTS BY OPENIN G EDUCATIONAL AS WELL AS VOCATION INSTITUTES AND CENTRES . C) TO PURCHASE MOVABLE AND IMMOVABLE PROPERTIES AND TO CONSTRUCT HOSTEL, LIBRARY AND MUSEUM OF WAR HEROES ETC. D) TO MOTIVATE GROWN UP CHILDREN IN JOINING DEFENCE FOR CE. E) TO HELP NEEDY CHILDREN OF EX-SERVICEMAN AND THE WI DOWS BY GIVING THEM STIPENDS, SCHOLARSHIP AND MONETARY AIDS. F) TO TAKE DONATION, GIFT AND GRANTS FOR FULFILLMENT OF THE AIMS AND OBJECTS OF THE TRUST. G) TO PROVIDE GENERAL MEDICAL RELIEF BY SUBSCRIBING TO OR ESTABLISHING CHARITABLE DISPENSARIES, HOSPITALS, CLI NICS AND / OR TO GIVE MEDICAL RELIEF TO POOR / EXSERVICEMEN/ WAR WIDOWS. ITA NO. 2693 DEL 09 REZANGLA TRUST, REZANGLA WAR MEMORIAL, REWARI 6 H) TO PROVIDE FOR PAYMENT OF SCHOOL OR COLLEGE FEES, BOA RDING AND / OR LODGING CHARGES AND PURCHASES OF EDUCATIONAL BOOKS AND STATIONERY FOR SCHOOL/ COLLEGE STUDENTS OF EX- SERVICEMEN/ WARD WIDOWS. I) ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UT ILITY (NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT .) 5.1 FROM THE READING OF THE ABOVE IT IS CLEAR THAT TH E REZANGLA SHAURYA SAMITI ACT OF CREATING A TRUST OUT OF ITS FUN DS IS WELL WITHIN THE OBJECTS OF THE ASSESSEE. BOTH THE TRUSTS HAVE COMMON OB JECTIVE OF HONOURING AND WELFARE OF MARTYRS OF OUR ARMED FORCES. H ENCE WE HOLD THAT REZANGLA SHAURYA SOCIETY WAS DULY EMPOWERED TO FORM THE TRUST. 5.2 SECONDLY, ANOTHER OBJECTION OF THE COMMISSIONER OF INCOM E TAX IS THAT AS PER THE TRUST DEED DATED 25.6.2004 PRIOR T O THE EXECUTION OF THESE PRESENTS, THE SETTLER HAD HANDED OVER THE SAID SUM OF RS. 10,000/- TO THE TRUSTEES. BUT ON SCRUTINY OF THE CONCE RNED BANK ACCOUNTS THE COMMISSIONER OF INCOME TAX FOUND THAT THE SAME WAS OPENED WITH A CASH OF ONLY RS. 1500/-. HENCE HE OBSER VED THAT THE SETTLED MONEY HAS NOT BEEN PASSED OVER AS STIPULATED IN THE TRUST DEED. IN THIS REGARD, LD. COUNSEL OF THE ASSESSEE H AS BROUGHT TO OUR NOTICE A COPY OF THE BANK ACCOUNT. LD. COUNSEL CLAIMED THAT THE SAMITI HAS DULY GIVEN A CHEQUE OF RS. 10,000/-. BUT ACCO UNT OF THE TRUST COULD NOT HAVE BEEN OPENED WITH THE CHEQUE. HENCE A FTER COLLECTION OF SOME CONTRIBUTION OF RS. 1500/- THE BANK ACCOUNT WAS OP ENED AND ITA NO. 2693 DEL 09 REZANGLA TRUST, REZANGLA WAR MEMORIAL, REWARI 7 THEREAFTER THE CHEQUE WAS DEPOSITED AND THE SAME WAS CLEARED ON 1.7.2004. 5.3 FROM THE ABOVE IT IS CLEAR THAT SETTLED MONEY HAS BEEN DULY PASSED OVER AND THE LD. COMMISSIONER OF INCOME TAX OB JECTION AS TO THE IMPROPRIETY IN THIS REGARD IS UNFOUNDED. HEN CE IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, WE SET ASID E THE ORDER OF THE LD. CIT AND DIRECT THAT THE APPLICANT TRUST BE GRAN TED THE REGISTRATION UNDER SECTION 12AA OF THE ACT. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/12/2009. SD/- SD/- [VIMAL GANDHI] [SHAMIM YAHYA] PRESIDENT ACCOUNTANT MEMBER DATED: 14/12/2009 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES